Abstract
This paper expands the available information on the effects of delisting in Russia, and represents a rare empirical analysis of the impact of external events on securities prices in this major global market. We seek to evaluate how stock prices of competing companies fluctuate around the dates of stock market delisting announcements and completion.
 We analyse stock prices as correlated with company delisting events from 2004 to 2019 on 552 companies on the Russian MOEX Exchange. The event study methodology is used to evaluate the abnormal returns of rival companies close to relevant delisting dates. These data were checked for statistical significance using the standardised Patell residual test.
 The results indicate a significant competitive effect on stock prices both on the dates of delisting announcement and on completion, with more significant returns close to announcement dates. These effects were found to influence the prospects not just of individual groups of companies, but of all market participants.
 We may conclude from our results that delisting is not an event limited in effect to only one company, but impacts the industry as a whole, temporarily changing its value. As such, it will interest both shareholders and managers of public companies, and any participants of industries in which delisting occurs.
Highlights
Companies issue their shares on the stock market in order to attract major new investments
This paper shows that the lack of visibility, together with the uncertainty of stock prices, stock returns and analysts’ forecasts, leads to low interest of investors in a company, which is positively associated with the probability of delisting
This paper is devoted to a delisting study and its consequences for stock prices of industry competitors from 2004 to 2019
Summary
Companies issue their shares on the stock market in order to attract major new investments. Several articles published by major Russian financial resources [3; 4; 5] raise concerns for investors who may face an unexpected delisting of companies in Russia This indicates the importance and relevance of this topic for investors, in order to expand available information on the effects of delisting in Russia. In addition to the fundamental internal indicators of the company, which underlie most pricing models, an external circumstance – in other words, an event mainly originating in other corporations – may affect the value of assets [6]. These events include IPOs and delisting from the market
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Schedule a callMore From: Journal of Corporate Finance Research / Корпоративные Финансы | ISSN: 2073-0438
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